Insurance

TERM INSURANCE

What is it?

• The lowest cost insurance option, providing a death benefit for a specified term

How does it work?

• The death benefit is equal to the face amount
• Guaranteed premiums for the entirety of the term (usually 10 or 20 years)
• Able to renew for another term or convert to a permanent product when term ends, but usually at significantly higher cost. Cannot renew beyond age 75 to 80.
•  Typically no investment component 

What is the purpose?

• Used for paying off debts thereby reducing financial obligations, helps replace lost income and allows fulfillment of some personal goals for dependents (i.e., college/university fund).

 Who is the client?

• Generally young individuals who may have dependents. They likely have higher debts and cash flow restrictions

DISABILITY INSURANCE

What is it?

• Income replacement if you are unable to work because of illness or injury

 How does it work?

• Insured receives payments to replace a percentage of lost income
• Has flexible options in waiting and benefit periods, occupation definitions, riders, etc., all of which affect the premium cost

 What is the purpose?

• To allow recovery without additional financial stress and ensure retirement planning and other investment goals remain intact

 Who is the client?

• An employed individual under age 65 who wants to supplement their group plan or does not currently have coverage (i.e., self-employed individual)

 CRITICAL ILLNESS INSURANCE

What is it?

• One-time lump sum payment after diagnosis of a critical illness (i.e., cancer, stroke)

 How does it work?

• After insured is diagnosed with one of the defined illnesses and survives beyond 30 days, benefit is paid
• Back premiums can be paid if Return of Premium rider was originally purchased and insured cancels policy without claiming

 What is the purpose?

• To protect against the high costs of recovering from a serious illness, provide funding to get top-tier medical assistance abroad (Best Doctors program) and ensure retirement planning and other investment goals remain intact

 Who is the client?

• Any insurable individual who wants to avoid the financial impact of a critical illness. 

LONG TERM CARE INSURANCE

What is it?

• Insurance providing tax-free benefits to assist in maintaining quality of life at home or at a facility

 How does it work?

• When at least two of six Activities of Daily Living (ADL) can no longer be performed and/or cognitive impairment exists, benefits are paid
• ADL’s include eating, dressing, transferring, toileting, bathing and continence

 What is the purpose?

• To provide funds to maintain day-to-day activities if the insured cannot take care of themselves and protect against the financial impact long term care may have on retirement savings

 Who is the client?

• Child buying for parent, to ensure funds for best care at home or at a facility
• Elderly buying for self to maintain independence from adult children
• Woman buying for self since men tend to die earlier leaving behind a widow

ANNUITIES

What is it?

• A secure and reliable guaranteed source of income for life. If non-registered, only interest will be taxed

 How does it work?

• In exchange for a lump sum of capital, income stream comprised of interest and return of principal is provided with various payment schedules
• Can be issued jointly, so survivor will still receive payments
• Term Certain Annuities guarantee return of initial investment if death occurs prior to end of term
• Life Annuities are less expensive as there is no return of investment if death occurs before term is over

 What is the purpose?

• To provide guaranteed income to fund monthly fixed expenses and a tax-advantaged income stream through non-registered accounts

 Who is the client?

• Retirees concerned about outliving their savings who want to minimize tax on investment income